In matched betting the ultimate goal is to win a bookies bonus, using arbitrage as a means to get it.

Bookies provide us with welcome bonuses, which we can use to our benefit. Let us see how these works.

For a matched bet to be possible, we need to find ourselves a welcome bonus. This is this money you will “win” in the end. A typical welcome bonus will give you a proportion of the money you deposit, normally 100%.

For clarity, this means that if you deposit $100, you would receive $100, making your total bank roll $200. This is not free money as you might think, there are different terms and conditions bound to this money, which are crucial to read. There are mainly 3 criteria which are important to follow:

- Minimum odds, the minimum odds you can bet so it counts towards your turnover progress.
- Turnover claim, the minimum amount of money you have to place on bets before you can withdraw any of the bonus money.
- Time restriction, typically you have 30 days to turn it over.

In addition to these there are other terms and conditions which change from bookie to bookie. Because of this, it is important for you to always read the bonus terms and conditions thoroughly.

If you want to know more about what you might need to think of when setting up an account, read this article. We now have the opportunity to take on the role as Andrew (backing), but we also need to be able to take on the role as Bobby (laying).

Now, we need something that gives us the opportunity to lay bets, and it’s here where the **betting exchanges** come into play.

Because betting exchanges work in a slightly different way than what you might have gotten used to, we are going to show you how they work and how we use them for laying bets. There are mainly three things that are important:

- Displaying of odds
- Liquidity
- Commission

**Displaying of odds**

Take a look at the odds display from one of the largest exchanges above. Right from the start there is something that is a bit off, we notice that the backing odds (in green) is almost the same as the laying odds (in blue).

The backing and laying odds are the complete opposite calculated from the underlying probability. The exchanges just display it this way to make it easier for people to do arbitrage bets.

Look at the odds from Senegal vs. Algeria.

The probability for laying Senegal victory is 1 – (1/2.96) = 0.6622, which corresponds to an odd of 1/0.6622 =

1.51.The true probability as reflected in the backing odds (2.92 in green) is 1/2.92 = 0.3425, which corresponds to a probability of 1-0.3425 = 0.6575 and an odd of

1.52for laying this bet.This means that if you were to lay 100 dollars on Senegal, you would get $151 back ($51 profit).

As you can see, the exchanges take **a margin between the backing and laying odds**. For exchanges, this margin is called the **spread**.

This is misinterpreted on a large scale, where people tend to think that higher odds are better for them. In this case it means the opposite: because the **laying odds displayed on the exchanges just tells you the corresponding backing odds for this laying bet**.

This margin is unfortunately not possible to get away from, because it all boils down to how the system is set up. For you to be able to lay a bet, there needs to be someone that has backed that bet in the first place. So, without going into details as to how the dynamics of the change in odds are, we can clearly see that there needs to be sufficient funds available at a particular odd before someone can lay a bet on it.

In this case it would mean that there has already been a lot of people betting on Senegal to win at an odd of 2.96. When there is enough money on this bet, the odds would drop to say 2.92 and the laying odds of 2.96 would be available to bet on.

If the laying odds drop as displayed on the exchange, it really means that the odds for that event to **not happen** actually rises.

This may be quite confusing, but it is important to understand a little bit of the mechanisms behind the exchanges to be able to understand what **liquidity** is, and how this affect you when matched betting.

**Liquidity**

All bookies and exchanges have limitations on how much money one can bet, which are constrained by the liquidity in the betting market. The liquidity in the market is basically how much money that is available at that specific market.

If we look at the displayed odds at the exchange, and the numbers below the odds, this means how much money you could bet on a particular odd before the odds change. For the non-coloured odds, it is what is available to bet on these odds, which are worse odds than the coloured ones.

This is important when matched betting because there needs to be sufficient funds available for you to make big enough laying bets at the exchange. Therefore, the higher liquidity markets are usually what you should bet on.

**Commission**

All the betting exchanges take commissions, some more than others. This is mostly the way they make money, taking a percentage of the profits on every winning bet. This is important to consider, because it affects the way you bet. We’ll come back to this later, when showing how we do a matched bet.

**Combining bookmaker and exchange to place a matched bet**

Since there are so many things which is important when doing a matched bet, we might need something to track the best bets. Here, software comes into play. For simplicity, we will call the software we can use Software A. They do compare bets at exchanges and bookmakers, to make it easier for you to do arbitrage as well as matched betting.

Because the highest liquidity markets are the most accurate and efficient when it comes to odds, positive arbitrage opportunities are fairly rare between bookie and betting exchange. Because of this we usually lose a small amount of money on each matched bet.

Therefore, we would try to minimise the losses and maximise the profits. Software A does this for us, first by finding all the best bets we can back (at a bookie we choose) that are closest to the corresponding laying bets (at an exchange we choose). This is a thing you could do manually for yourself but it can be time consuming.

Software A will also provide us with a calculator which calculate the stake size on the exchange, or the lay stake. We want to bet all the money on the bookmaker at once, so it is the lay stake that is important.

The lay stake is important because of odds differences between the bookie and exchange as well as the commission on the exchange. You can find all the math behind the calculation here, but it is much easier to just use the calculator provided by Software A.

Keep in mind that this is a paid service, but it is not much money compared to what you will gain If you start match betting.

Let us now use a simple example to just see how it would work if we were to do matched betting. We would start by going to Software A and find ourselves a bet. In this example we get 100% bonus on 500kr at the bookie.

We now have 1000 kroner in our bankroll at the bookie. Right now, we choose Sheffield United versus Crystal Palace as our match.

We can see that a draw in this match has no difference in odds, but we won’t break even because of the commission the exchange takes. We also notice that the liquidity is high (25,429kr).

To find out what we should place, we click on the match and go to the calculator. Then put in our stake at the bookie (1000kr). We will then get the amount we should bet at the exchange to lose the minimal amount of money, regardless of the result. As we can see in this example, we would lose 14.3kr on the bet we placed.

Then we go to the bookmaker and place a bet of 1,000kr on an odd of 3.3, giving us a potential return of 3,300kr and a potential profit of 2,300kr. The reason to why we bet at the bookmaker first will be explained in the last section where I go through matched betting tactics.

Then we go to the betting exchange and bet against draw on the same match. Be sure to do this quite fast, as the odds might change between the two bets you need to place. To clarify, we do the math on both sides:

You might notice that the betting exchange makes it very easy for you to place matched bets, which is the reason they display the odds as they do. The lay stake you use (1006.1) will be almost the same as the back stake, because this is the potential profit at the exchange.

Potential return and liability on the exchange are slightly higher than on the bookie because we need to accommodate for the exchange commission and usually in other cases also for the difference in odds.

Now we have made a matched bet, losing 14.3kr regardless of the outcome. And if we remember correctly, half of the money at the bookie isn’t ours. This means that if Sheffield United or Crystal Palace were to win, we would be 500-14.3kr = 485,7kr in profits.

If it would be a draw, we would need to make at least another bet, depending on how big the turn over claim is as well as minimum odds (or other terms and conditions). For every bet we make we usually lose a small amount of the total money we bet, as in this case. But, we can also make a small amount, which happens when the backing odds are higher than the laying odds.

Hopefully, you now know how a matched bet works, as well as how to make money off it. The next important thing is how you approach this, so you could make the most money in the shortest period of time. Let us go through a couple of things you should consider:

- How to place your first bet
- How to place your second bet (when winning at the bookie)
- After you have placed any bet

We use the same example above, but now we have to turnover the bonus 6 times (6 x 1000 = 6000) at a minimum odd of 1.5. We will also have 20,000kr at the exchange, this is important in how we decide to bet from the start.

When placing the first bet, there is two possible outcomes:

You win at the exchange and lose at the bookmaker

Or

You win at the bookmaker and lose at the exchange.

You should always try to **win at the exchange**. That is because there is no turn over claims on the exchange, and you would need less money in the bank to keep placing matched bets.

You should also always bet with all your money on one match with quite high odds on your first bet because this increases the probability of you winning at the exchange. So, let us see what we do if we bet on draw/not draw on Sheffield United vs. Crystal Palace. There are still just two possible outcomes:

- We lose 1000kr at the bookie, and winning 985 (= 0.98*1006) at the exchange. If this happens, you should find another bookmaker and do it again! You made profits.
- We get 3300kr at the bookie, and lose 2,314 at the exchange. We now have several options on what to do.

After the first bet, we now have:

We have a turnover of 1000kr at the bookie, and we need to turn over 5000kr more before we can withdraw the money. Because we have a good amount of money at the exchange, we could try bet all the money at the bookmaker on a bet with high odds.

I would go for an odd of 4 or below, because you would risk losing 3300*4 – 3300 = **9900kr** at the exchange and you would have 17686-9900 = **7,786**kr left there. This is more than enough to turn over the last 6000-3300-1000 = **1,700** kroners, with a minimum odd of 1.5.

If you were to have a smaller bankroll at the exchange you might want to choose a smaller welcome bonus or go for the lowest possible odds after the first bet.

This example gives you a reason to why it is important with a large bankroll at the exchange as well as why you always should try to lose the first bet at the bookie.

To clarify, the amount of money and time spent if you win the first bet at the bookie is immense compared to the contrary. **You should always try to win at the exchange.**

When you first place a matched bet, you should always bet on the bookie first, as mentioned earlier. This is because it is usually at the bookie they will limit how big a bet you can place without you knowing it beforehand.

As you now know, the liquidity at the exchange is easy to find, but the bookie usually hides this. This is to mitigate for the risk that you have placed a bet at the exchange that you cannot match at the bookie.

You should also take a couple of minutes before the match you have bet on starts, to check if the bet at the bookie still holds. The bookies can void bets for several reasons, and this check-up has saved me countless times.

If you have a voided bet and you can’t seem to fix it on the bookie, you could easily do the same backing bet at the exchange to match your bet, so you would lose a small amount of money instead of possibly a large amount. Or you could be a crazy person and take a chance on your laying bet at the exchange.

**Key takeaway**

There are other ways of doing matched betting, but I have constrained this to the ordinary welcome bonuses because this way provides the best value. There is also possible to clear bonuses by value betting, and you can read about the differences between the approaches here.

You should now have learned how a matched bet works and have some smart tactics you could use to start your matched betting journey. Be sure to know your stuff, so read the articles on how to set up accounts, what odds are and what a bet is. Good luck!

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